AB InBev acquires SABMiller in massive beer merger

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NEW DELHI (CNNMoney) — Anheuser-Busch InBev has agreed to buy its main rival SABMiller for £68 billion ($104 billion), creating a super brewery with sales of $55 billion.

The combined firm will be the world’s largest beermaker by far, with nine of the world’s top 20 beers by volume.

AB InBev will offer most SABMiller shareholders £44 ($67.59) per share for the maker of Miller Lite, Pilsner Urquell and Peroni, a premium of roughly 50% over the share price before acquisition rumors started flying.

The two biggest shareholders — Altria and Colombia’s Santo Domingo family — will have to opt for a cash and shares alternative worth £39.03 ($60) a share. Altria, a U.S.-based cigarette maker, had been pushing SABMiller’s board to make a deal with AB InBev.

The companies described the agreement, which must be approved by regulators, as a “possible deal.” SABMiller’s board members have indicated they will recommend the offer to shareholders. If the deal falls apart, AB InBev will pay a $3 billion penalty to SABMiller.

If completed, it would be the biggest beer deal ever and one of the biggest corporate takeovers of all time.

SABMiller had been playing hard to get. The brewer turned down at least four previous offers from AB InBev — its first approach was worth £38 ($58) a share.

As younger drinkers turn in ever greater numbers to independent breweries, the global market leaders have been trying to defend their market share.

AB InBev has swallowed Seattle’s Elysian Brewing, Oregon’s 10 Barrel Brewing and Chicago-based Goose Island in the last year or two.

SABMiller has also tapped into the craft beer scene, buying one of the UK’s most successful independents, London’s Meantime Brewing Company.